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January 7, 2014

Padding your pocketbook by moonlighting

Moonlighting pay varies depending on various factors, including your specialty, location and practice setting. Unlike residency compensation, which is a set stipend or salary, you’ll be reimbursed on a per-hour, per-shift, per-patient or even per-service basis.

How you get paid for moonlighting

Some organizations do a combination. For instance, your base rate may be a relatively low $40/hour, but if your organization adds an extra $150 for every patient you see, it could be profitable. Just remember to inquire about the traffic pattern. Will you see enough patients to make this worth your while or will you have time to study because it’s generally very slow? And is that important to you?

The tax implications of moonlighting

Also, make sure you understand the tax implications. If you’re considered a staff member, the organization will withhold and pay taxes and other employer contributions, which will be reported via a regular W-2 form. But if you’re an independent contractor, as are most moonlighters, the money you earn will be considered pre-tax income. Instead of your employer withholding deductions from each check, you’ll have to estimate and squirrel away sufficient money to cover the taxes on that income. At the end of the year, your employer will issue a 1099 form.

The important point is to know the difference. Although Menefee didn’t understand at first that as an independent contractor she’d be responsible, others advised her about setting aside funds with each check so she wouldn’t feel the crunch later. "It’s really important to understand that this is pre-tax money," she says. "If you don’t know that, you won’t have enough to cover yourself come tax season."

The pros and cons of moonlighting

Also, although you want to be paid what you’re worth, it may not always be top dollar. One of the benefits of moonlighting, however, is that most organizations pay part-timers relatively quickly even though it may take time for them to be reimbursed. You turn in your hours and see a check in one or two weeks. So you may not be earning a premium, but the convenience of not worrying about billing and other overhead can be worth the difference.



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